Before donating to an organization, you should first determine whether it’s a qualifying charity. This will help you avoid donating to charities that are scams. Only organizations that appear on the qualified donees list are charities that are eligible to issue tax receipts.
What Charitable Donations Qualify for a Tax Deduction?
Will your charitable donation qualify for a tax deduction? To be eligible, your donation must go to one of the following:
- A charity that is registered
- A Canadian amateur athletic association that is registered
- A national arts service organization that is registered
- A housing corporation resident that is registered in Canada and created to offer low-cost housing for the aged
- A Canadian registered municipality
- A municipal or public body that is registered performing a function of government in Canada
- The United Nations and agencies affiliated with the United Nations
- A university registered outside of Canada that is prescribed to be a university at which the student body typically includes students from Canada
- Her Majesty in Right of Canada
Before donating to a charity, you should check the Canada Revenue Agency’s list of charities and other organizations that can issue donation receipts.
How to Avoid Charity Scams
While you hope that the vast majority of charities are honest, you must be cautious, as many are fraudulent and attempt to take advantage of the generosity of others. Before you donate to charities, it’s important to make sure that your money is going to those in need. The Royal Canadian Mounted Police offer the following tips for avoiding charity scams:
Before donating to a charity, request written information about the charity, including its name, address, and telephone number. An honest charity will gladly provide this information, along with details about where your donation money goes, and proof that you’re able to claim a tax deduction by donating. Ask the charity for their charitable tax registration number. Confirm the charity’s registration number by calling the CRA at 1-800-267-2384.
Request to see the charity’s financial statements. Most honest charities have this information available on the Internet. If you’re contacted by the charity over phone or at your door, ask for identification. If the person soliciting the donation refuses to provide identification, hang up the phone or close the door and refuse to donate. To confirm whether or not this had been a legitimate request, call the charity directly.
Be wary of charities with familiar-sounding names. Some fraudulent charities use names that sound similar to honest charities. If you notice that the name is slightly different than it should be, call the legitimate charity to find out whether they are affiliated.
If you come across a charity scam, you should report it to your local police department, as well as the Canadian Anti-Fraud Centre at 1-888-495-8501.